Making a difference

As the number they employ continues its long decline, Tar Heel manufacturers manage to do more with less.

By Maggie Frank

Broyhill Furniture Industries, the Lenoir-based manufacturer that once was a Tar Heel icon, ended last year the way it ended 2005: announcing that it was shutting a plant in its hometown. But this one, scheduled for this month, closes a chapter in the state’s business history. It’s Broyhill’s last U.S. wood-furniture factory.

Like textiles and apparel makers, North Carolina furniture manufacturers have been shedding jobs for years. That’s because it’s cheaper to make products elsewhere, especially Asia. But Broyhill means more than a brand. The company’s roots go back more than a century, but its greatest growth came after James Edgar Broyhill mortgaged his house in 1926 to buy a small chair maker. It would become a $265 million business and the nation’s fourth-largest furniture maker. His son, Jim, would serve 12 terms in Congress and be appointed to the Senate in 1986.

In 1980, the Broyhills sold the company for $151 million to what’s now St. Louis-based Furniture Brands International, which also owns the Thomasville, Lane, Drexel Heritage, Henredon and Maitland-Smith brands. You need not delve deep into history books to trace furniture manufacturing’s decline in North Carolina. Just follow Furniture Brands, which last year had about 8,000 Tar Heel employees, ranking it 15th on Business North Carolina’s list of largest for-profit employers. It fell six spots from the year before, when it employed about 9,700 in the state. In 1999, the figure was 13,300.

It’s part of the shift toward a service-based economy. Bentonville, Ark.-based Wal-Mart Stores is far and away North Carolina’s largest employer. Retailers and banks dominate the top of the list — Smithfield, Va.-based meat packer Smithfield Foods is the only employer in the top 10 that has a North Carolina work force devoted mainly to manufacturing. Seven years ago, 21 of the top 50 did. Now just 11 do.

From December 2000 to June 2006, manufacturing employment in the state shrank nearly 27%. And it’s not only because jobs are moving abroad. N.C. State University economics professor Michael Walden says manufacturers can do more with less labor. “North Carolina is actually producing more manufacturing out-put, or [it] did last year, than the previous year. You don’t have as many people working in manufacturing because those work-ers are working with modern machinery and technology.”

In 2000, the sector employed 19.6% of Tar Heel workers. In June 2006, it was 14%. But as textile mills, apparel plants and furniture factories lose jobs, Walden says, they’ve been “counterbalanced by the increase in output that we’ve had in other sectors of the manufacturing economy like technology, pharmaceuticals, machinery and vehicle parts.”

Overall unemployment, after dipping below the U.S. rate for the first half of the year, rose above the national average in August, September and October, when it was 4.7%. Still, that was nearly a percentage point below where it had been in October 2005. And the job growth hasn’t been only among low-wage retail and food-service employers. The biggest gainer has been health-related employment, which has increased by 25% since 2000, when it accounted for 10.4% of North Carolina workers. Last June, it totaled 12.8%, according to the Employment Security Commission.